Skip to Content

Tag Archives: Cisco

OLD NEWS

The stock market pulled a classic trick today. Before the opening, the government announced what everybody on Wall Street — indeed everybody across America — would have to greet as “good news.” The Commerce Department’s initial estimate of the 3Q03 Gross Domestic Product came in at a sizzling 7.2% annualized growth rate.

A SUBTLE MOOD SHIFT

Maybe it’s just because a lot of traders are out on vacation. But the stock market has acted surprisingly listless of late.

Last spring, it seemed nothing could hold the market back. Stocks went up on any scrap of good news, and even bad news triggered only the briefest selling squalls.

OVERLOVED, BUT NOT OVER

The speculative sap isn’t just rising on Wall Street. It’s boiling! According to the latest Investors Intelligence survey of newsletter writers, bulls on the stock market outnumber bears by a margin of 3.6 to 1 — the widest plurality since the spring of 1987. Other polls show a similar huge jump in optimism.

MOMENT OF TRUTH

This frisky stock market has reached its moment of truth. A short-term pullback is almost certain, given the overbought readings I’m seeing on my technical indicators (breadth, momentum and sentiment). When it comes, the pullback will tell us a great deal about the market’s true health. The market always looks strong when it’s going up. If it can maintain its composure on the way down, we’ll know that a real bottom is in place — and that it will be time to “buy with both hands.”